Money laundering scandal erodes sentiment in luxury homes market: report

In 3Q23, luxury homes slowed further to 37 units, translating to a 41.3% QoQ drop.

The luxury homes market was rocked by Singapore’s biggest money laundering scandal, pushing transactions to further slow in 3Q23.

Based on investigations, 60 completed and 34 uncompleted residential properties were seized from 10 foreigners suspected of money laundering.

Many of the residential properties are luxury homes on both the main island of Singapore and Sentosa.

According to Huttons, the money laundering probe “further eroded sentiments in the luxury homes market” following the Additional Buyer’s Stamp Duty (ABSD) rate hike in April.

In 3Q23, transactions dropped 41.3% QoQ to 37 units. The value of luxury non-landed homes likewise fell in 3Q23, dropping 50.9% QoQ to $295.8m.

In the first nine months of 2023, a total of 222 luxury non-landed homes worth $1.82b were sold. 

“The transacted amount from 1Q to 3Q 2023 was almost 25% lower than the same period in 2022,” Huttons commented.

Huttons, however, said that the lower transaction volume of luxury non-landed homes may also be due to “more foreigners choosing to rent while they wait for the approval of their permanent residency status before buying.”

Huttons believes that the probe will also affect the luxury rental market.

“After the arrests of money laundering suspects in GCBs, owners of GCBs are increasingly wary of renting their GCB to Chinese foreigners. The rental market is likely to remain subdued in the coming months,” Huttons said.

“Many owners of GCBs are holding back from selling as they do not think buyers are willing
to match their asking prices,” Huttons added.